Wealth Strategies: Retail investor doesn't trust the markets

Friday, August 03, 2012 - 03:06

Aug. 3 - The latest trading glitch at Knight Capital, coupled with other recent market malfunctions, has resulted in a hit to investor confidence and could results in immediate outflows from equity ETFs.

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The flash crash the botched FaceBook IPO -- trading glitch at -- capital. All recent market malfunctions causing huge losses for some investors. So have such offense and retail investors flying out of equity funds. For his thoughts joined by hydrazine had a resurgence. At leopard Tom we obviously don't have daddy at reflecting this week's news but do you think will see a big outflow. Based on that latest news with night. -- and I think that's an interest in peace because you know what we're taking a look at total flow is. When Nancy outflow at least we might see that made up in money market funds but what we've been seeing the impact. Act these type of -- is really an equity side of the equation particularly if flows and equity funds. And I do think we'll have a immediate impact on on what that does we have two sides of that ETS and open and funds. Open end funds are less likely move real quickly begin will get a response will be able check the pulse on the ETF very quickly next week. -- equity fund -- since the last crash tell you about investor confidence. Overall. It the retail investor just does not you know trust the market right now. Even while we had you know -- very strong performance we saw the Dow actually over thirteen thousand -- right on the 27 July. We did not see any resulting in full effect we saw flows out of we've onto it figured. Figured retail investors when it jumped on board or we can't see those pick up of institutional investors using ETFs. Both you know getting rid of them during the down times and anticipated it fine when they thought they could get into low so we've -- a lot of volatility. By these events in retail arts are institutional investors on the tip us on the market. Summer we see retail investors come back to the market or are all these problems. Really putting a permanent dent in sentiment. Well -- And there's a couple of areas that we might see first ball we've been seen inflows into dividend paying stock funds so -- putting them on and actually take him pretty good money. We saw other dividend -- real estate funds which have been -- down recently and now becoming an actual Demorrio people going and that's what people are investing. But it's selectively so certainly while there's this concerned about the market. They're gonna you gonna continue to plow money into those kind of safer areas of the -- the community or they're gonna talk to the dividend payers equity common real state funds. See you tracking fund flows for awhile they what does this last period is very tumultuous period. Tell you about possible permanent changes the dynamics. Well you and I think that's probably the biggest questions revolve and asking ourselves we are seen. You know they talk about it changed the new Norman now in the -- certainly receive investors prefer to -- on a fixed income funds rather than the old traditional equity funds. And we all learned about our -- satellite portfolios we had at 7080% equity funds. Now we're seeing investors switch and stays switched so the older great America they're wrong or -- as much equities they did they're now on their money and really significantly. Into fixed income securities and that is a change of pace. That is common Zain thanks -- I'm Rhonda schaffler this this writers.

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